Read below why the Board is doing this and how it is being implemented.
Why?
Pensioenfonds PDN aims to transition to the new pension system on 1 January 2027. At that point, the funding level is important. The higher the funding level, the more assets PDN can allocate to members on a one-off basis to increase their pension pots. This particularly benefits those already receiving a pension (pensioners, surviving dependants and members who are fully incapacitated for work), as their pensions will rise immediately in 2027.
The funding level is currently higher than it has been for a long time. However, because the funding level moves in line with developments in the financial markets, this can change quickly. A fall in equity values or a decline in market interest rates are the main risks that could cause the funding level to drop in the coming period.
How?
In October 2024, when the funding level stood at 127%, the Board decided to further hedge the interest rate risk and reduce the proportion of high-risk investments. The aim was to limit the extent to which the funding level fluctuates with economic conditions.
Since then, the funding level has risen further, reaching 139.4% at the end of June 2026. With the transition date of 1 January 2027 now approaching, the Board no longer considers it responsible to continue bearing the full remaining equity-market risk. The markets are highly unpredictable. A (sharp) decline in the period leading up to the transition would directly affect PDN’s pensioners’ income. The Board has therefore taken measures to reduce the impact of a fall in equity markets on the fund’s funding level. It has done so by purchasing so-called put options on Pensioenfonds PDN’s equity investments. These provide protection against a fall in their value. The Board considers the associated costs justified in light of the benefits for those already receiving a pension or nearing retirement.
The Board emphasises that not the entire risk of a fall in the funding level has been hedged. This is mainly because the interest rate risk has not been fully hedged and the fund cannot hedge all of its investments.